City Council Committee - Regular Meeting

It is 1220 on October 6th, Tuesday, all day. As my former colleague Martavius Jones used to say, got to see him over the weekend. It's good to see him. We have, colleagues, three items on today's agenda. Did you call the roll?

Chair Connelly is here. And Councilwoman Logan is here.

The Councilwoman Rhonda Logan is here. All right, colleagues, it's gonna be a heavy day, so we'll have a little bit of fun here, lighten the mood. We have three items on today's agenda. The first two look to be like we are gonna clear up some amendments to our community grant program. So item number one, a resolution to amend the fiscal year council community grant program allocations all council districts sponsored by Councilman Smiley. May I have a motion and a second? Move it. Any discussion on this item? Seeing none, all those in favor of sending this down with a positive recommendation, s

That was always going to be my question when you finish this. How do you get to an income approach basis? Not under the current statutory schemes, but we just... You could have self-dealing and all these other things, but there has to be some sort of mechanism.

No doubt about it. I mean, and here's the deal, you're talking about it, it's a reverse pilot, meaning like if you get, whether whoever gets the control on that lever, right, like you elect to take the income approach, and then it's based on, even if it's a special election, you're still allowing us the opportunity to make an economic development decision, or the state can, and my point is that other states will eventually follow suit. It will be modeled out because they won't be able to say no to that.

I mean, it makes sense. You can't build a heavy restaurant without a grease trap, right?

And I'm and I'm available for any questions and make sure that you're if there's anything else I've got if we recognize that we've got Cooper Sutton, white and green are now joined us and we've got Councilwoman Easter Thomas in the queue and then white and Dr. Warren's Councilwoman East Thomas for jurors.

I couldn't tell what order I was in because you was calling out everybody. Thank you, Chair. Good to see you. You too. Can you explain just the ebbs and flows, the increase and decrease we see in these projects? Or you didn't give us this sheet.

Who gave us this? That one, yeah, I saw it. That's... Good question. There are two things in front of you. In a red folder, there's a report from the assessor. I'm looking into revenue impact. The chief financial officer put together on the fly for me, which we can go over here in a minute. Okay.

Well, my question is on it, so it can wait.

Thank you. Mine is not about the data center revenue. I just wanted to know if the assessor's office, since we have you here, if you have reviewed the potential DPD rezoning that we have before us later this afternoon and factored that into any potential impact in terms of rezoning commercial properties to residential, being that they're assessed at a different rate.

Sorry, brief answer since it's not germane what we're doing here. Yeah, it's all right. Quick answer, but yes. I got it. I'm with you. I'm with you. Yes, sir, please. And y'all can catch up afterwards, but yeah.

All right, hold on. Wait, let me go to Dr. Warren, and then I'll get Councilwoman Logan, and then Councilwoman Walker.

I just want to make sure that I can... Take what you said and shorten it to where it makes sense. Essentially, what you're saying is we've been making money and we plan to get more money from the data centers that we can use as a tax revenue that is not coming out of people's property taxes. So that we've got. And the other is what is happening to people's property that are near these data center? Are they losing property value? Has that changed? Has it remained the same?

Yeah, I mean, just two sentences. You said it in a sentence. I can't do it in two sentences.

If we went and moved and regulated these data centers in such a way that they were not near neighborhoods and not near parks and not near schools, then their ability to lower the value of neighborhoods would be markedly diminished.

Thank you. That's what I was looking for. Thank you. Councilman Logan?

Thank you, Chair. Thank you so much for being here in your presentation. It's very informative. Two questions. One, you mentioned that going from commercial to residential, you're going to lose the money.

They're the same. That's my question. Are they the same industrial and commercial? They are the same. So when you go from industrial to commercial.

Okay. Now, based on what you just said, if during this UDC upgrade and change, If there is a new designation for data centers or hyperscale centers, would you be able to evaluate certain, if we put them, if it requires them to be a certain distance from residential churches and all of that, and they're set throughout the city, how can we benefit, or how can the neighborhoods still benefit even if there are ways away from a neighborhood? Can we put language, or can language be put in there to where that's the new distance, and if it's 25 miles away, we still can obtain funds from that.

able to, because of where they're located now, like XAI, you're not able to evaluate whether or not the homes have gone up or down?

Last question. There are industrial zones in communities throughout our city, unfortunately. And based on what you said, you all go out and take a look at those sites. For what purpose?

Thank you. Thank you. I appreciate that.

Councilwoman Walker, the floor is yours, and then Councilwoman Cooper-Sutton.

Thank you. Thank you, Mr. Chair. Thank you for coming today, and congratulations again. So if you don't mind me asking first, when did you receive the invite to appear before this committee today?

Okay, thank you for that. So I just want the record to show that the Gitwell location is in District 3, and the Tulane location is, it backs up to District 3, and I just want everyone to know that if you didn't know that already. And in terms of the potential revenue that can be generated, That is great, but we're sitting on revenue now that we can't vote on. I know we're going to vote on it eventually. I hope so, the community benefits. But to me, it just seems like a contradiction to be voting on a moratorium, and we haven't voted on the community benefits. And then in terms of the revenue t

So we are already sitting on 3.2, soon to be seven additional, which would make 10.2 total tax dollars, 25% from the first two years. And we can't vote on it. So... I hear what you're saying, and that's great, but what does it mean if we can't vote on it? Thank you, and I yield the floor.

Okay. Thank you, Councilwoman. Councilwoman Cooper-Sutton?

Thank you, Chairman. I want to discuss what Councilwoman Walker, and it's not about the tax dollars and the revenue. It's about the hypertech that's coming to, I think, that have permits out there to the Fritz building. And I'm not sure, and I think that is industrial development. Because there's a lot of other factories around that area.

Okay. And I'm super District 8, so I represent that with Councilwoman Walker. When I visualize sitting here, when I visualize that and the moratorium that I think we will be discussing later on, This is zoned for industrial. Am I right?

Okay. And I haven't researched yet the mileage from residents because I don't remember seeing any residential. They're back over there off of that little street. Can I just make it very clear so you won't say that? I'm not. I don't know the streets off my head like... Most of these council members do. I just know how to get what I need to get when I need to get there. That's all right. Okay. And I know that there are some houses. There's a four-way stop. There's like a service station, a barbecue place, and then you can go on down, and then there are houses in that area. I know you all have ce

All that is Oak Haven. Okay. I've been over there. I just didn't know it was Oak Haven. Okay. But I know across there is Oak Haven. So what's the distance? You would know that because you're, what's the distance from where Fred's is and Oak Haven is?

I can't tell you that, but I can look it up right now in real time. Okay. You can do that.

Google. Okay. I'm just, because they have a permit out there. They're wanting to come here to Memphis. They do. And so I think that was one of the companies that President McGowan talked about as far as the permitting process. But I just wanted to know, they are located in an industrial, right?

All right. I found that it's 2.2 miles. Okay. Sounds great. Thank you. I just wanted to make sure that I cleared it. Thank you, Chairman. Yes, ma'am. Thank you.

Yes, sir. Thank you. Look, especially in this subject matter, given your years of experience and expertise, and certainly the deputy assessor, which, by the way, I'm just so excited. For me, congratulations. Thank you for your years of experience. Thank you for staying to serve, especially in these roles. It makes me just so pleased. All right. Thank you for that. I've got Councilman Walker. Thank you.

Yes, so are there ever instances or is it a possibility that homes that are within a certain proximity to these data centers that their values will go up?

Thank you, ma'am. All right. Thank you, Mr. Bailey. All right. I know that Councilwoman Easter-Thomas had a quick question for Chief Davis. I guess we'll run over at a high level. I'm just going to give my man a break here, though, because it was me getting to him late, so this was a rush job.

Yes, sir. All right, thank you. Unless you want to hang out. Absolutely not. Be careful, more questions will come. Smart man. Thank you very much. Really appreciate it. You guys are going to have your work cut out. I will have questions later. I didn't want to meet with you. I have bigger questions about how we mark to market across. I know that you've had thoughts. I had to have had thoughts of your time in the office. Do we start really marking to market so that we can readjust our millage rate and all those things? But they're Herculean undertakings. But if you want to have a discussion bef

We can get into the weeds on the inputs, but ultimately at a high level, if nothing else changed, this would be your revenue. under the current status. And again, he mentioned the assessed value. Don't get lost on the fact that the assessed value could be a function of, is a function of the appraised value, which could go up or down. The assessed, the state could change the, it could reclassify how to assess data centers, which could go up or down. So again, I just wanted to be apples to apples. This is what we're getting today. Now you know. I honestly wanted to know. And so, yeah, anyway, th

Thank you, Chair, and thank you, Chief Davis. I know you were going to answer my initial question, but when you did that, you gave me another question, which also may be quicker. So, yes, you said depreciation of whatever they have, which is causing a dip in 27 and 28. This is a budget now question because you have it by general fund, debt service, and CIP. That means we already in this... FY27 budget that we passed this year that you came in on the tail end of, we already included that 73% in our budget. That is correct. Okay. And so that means for the next one, two, three, four fiscal years

Okay, thank you. Yeah, I think, and I, we haven't really talked about it, and mainly just because there's been so much going on in the dialogue, but this is one of the first few times, like when this body convenes, and most municipalities convene, and they say property taxes, they are talking about real property taxes, land and building. That is very important here, especially when you talk about the rent and the income approach. However, like Federal Express, personal property taxes here are the real hero. And what will be interesting is there are some nuances that are going on right now abou

And again, I will say, just for you guys as decision makers and members that are going to come back for another term, like, That's why industrial zones are so interesting. They're throughputs. We could have a larger discussion on it, and I would get with the assessor. I mean, he's been running, he knows it. But that personal property tax without a pilot is significant. So anyway, Councilman, did you have any other questions? All right. Anybody else? We're going to get out of here. Before we adjourn, just for the public and for the body, we are going to reconvene at 1.20 for Public Works, Solid